Vang SJC

In early trading week yesterday (21/12), gold prices have rebounded for second day in a row after the Federal Reserve (Fed) decision to raise interest rates. Prices fluctuated in a wide range between $ 1,081.79 and $ 1,063.90 / ounce. The price ended up at $ 1,078.28 / ounce, up 1.2% compared with the opening price of $ 1,065.88 / ounce.

The specific cause price increases Gold was analyzed here.


Fundamental Analysis

Last week, in the meeting of December 15th and 16th, the Federal Reserve decided to raise interest rates by 25 basis points to 0.25-0.5%, commencing the first tightening cycle since 2006, after While these institutions hold interest rates near 0% to cope with the impact of the financial crisis in 2008. The monetary tightening that the greenback become more attractive in the eyes of investors held by Chengdu USD was higher interest rate. Meanwhile, people who invest in gold would only eat arbitrage by holding precious metals are not earning interest.

However, before the spokesman positive about the prospects of inflation the Fed Chairman, Janet Yellen, the price of gold is likely to turn up again. The reason is that precious metals are used to counter inflation, while inflation has increased the outlook in the medium and long term, will help boost demand for precious metals and gold prices rose.

In the latest draft of the medium-term, the Open Market Committee (FOMC) said that by the end 2016, the federal funds rate will be raised to 1.4% before the end of 2017 reached 2.5% retrospect tightening phase 2004-2006, when the Fed decided to raise interest rates by 25 basis points in 17 consecutive meetings, markets are anticipating the Fed will act similarly, is expected to be 4 times to raise interest rates in 2016. However, , chairman of the Fed, Janet Yellen said the Fed she would consider economic data to determine the timing and amplitude of raising interest rates.

Yesterday, Fed Chairman branch Atlanta, Dennis Lockhart said he, the central bank pledged to tighten slow route, does not mean the Fed will raise interest rates in all the meetings, in the context of growth next year will be “improving but no breakthrough”. According to data compiled by Bloomberg, the possibility of the Fed raising interest rates in the May meeting only about 51% 4/2016. Mr. Sam Tuck, currency strategist at ANZ Bank senior New Zealand Ltd., said “further USD long position in the market, but with the process of normalizing interest rates so slow, we’ll see USD price trend is not as strong as before. “

Besides, the confidence of the regional administration and service production stood at its lowest level over the past year due to weakening global demand, declining commodity prices, a stronger US dollar are affecting production and exports of both goods and services from the US. The scene’s bleak US economy last week reduced expectations the Federal Reserve to raise interest rates in the first quarter / 2016, able to drag the value of the greenback goes down and support gold prices go up.

To the demand for physical gold, according to recent data from the IMF, central banks are increasingly buying gold amid precious metal prices declined 6.8% in the previous month, as investors speculated the Fed will raise interest rate in month 12. The People’s Bank of China (PBOC) announced the gold reserves of the 2nd largest economy in the world has increased by 5.1% compared to January 7. Kazakhstan has about 27% of gold in foreign reserves , while Russia is 13% and China with about 2%. Country holds the world’s largest gold US with 73%.

According to the World Gold Council (WGC), the central bank and other financial institutions also accelerate the pace of buying gold in the third quarter to a record high close to balance their assets over time buy in dollars to catch waves rose eve of Fed meeting.

Today, the market will wait for more news from the US important. Specifically, at 8:30 pm GMT + 7, the Bureau of Economic Analysis will publish third quarter GDP data, which is forecast to reach 1.9%. If compared with the second quarter increased 3.9% and 4.3% in the third quarter of last year, this is a pretty strong decline. The global economic slowdown, production stagnated, exports decline, stronger dollar is the main reason the US economic slowdown in the third quarter of this.

At 10:00 pm, National Brokers Association (National Association of Realtors) will publish the available sales in November (used to distinguish the new home sales). This is a leading indicator for the economy’s health by affecting the sale of many sectors of the economy. For example, a house being acquired will require restoration from the new owner, tungan mortgage payments to customers and broker … not to mention the need for other household prepared. This index rose fell erratic in recent months and is forecast at 3:32 million units, down 40,000 units compared with October, but rose nearly 4% over the same period last year. However, the available quantity is low, causing house prices rise faster than import growth rate cuathu, plus the Fed raising interest rates will cause lower solvency before. If tonight’s report for figures not as expected, the greenback likely continue to decline, supporting gold prices go up.


Technical Analysis

Currently, at 15:22 GMT + 7, gold is trading at $ 1,078.23 / ounce, virtually unchanged compared with the opening price $ 1,078.16 / ounce.

Observe the H1 chart the price was on the rise in recent two trading days, the price has peaked since the day at 9/12, exit 6 year lows after the decision of the Fed to raise interest rates. Currently, the price is moving sideways and is capable of repeated peaks of yesterday was $ 1,081.79 / ounce.

Tools TREND MuaEA SIGNAL buy signal late 6th session last week, now earn 208 points for us. Indicator continues to give us a buy signal today.


Psychological Analysis

The market today has escaped pressure from the Fed meeting. Condition bleak US economy has overshadowed somewhat the ability of the Fed to raise interest rates in the first quarter / 2016, even only 51% of the market bet on the ability tightening in April next year. Prospects Dollar slow price increases will cause investments to switch to other channels such as gold, especially during the financial institutions are rebalancing portfolios and stocks in countries such as China and Russia take advantage of lower prices to buy gold.

Observe the H1 chart in technical analysis, candlestick 3 compared with 4 candle fell and 3 closed candle close to the opening price indicates that the market is in sideways. Prices are fluctuating in a narrow range, small volume showed that previous market expectations of important data today.


The Fed raised interest rates make dollar becomes more attractive investment channels in the eyes of investors due to a higher interest rate, while investment in gold to more risky can only eat profit because the price difference is not in the interest rate over the holding period. In its meeting of 15-16 / 12, the FOMC is expected to raise interest rates by 4 times in 2016 showed that dollar could still rise next year, dragging precious metal plummeted.
If gold retreated in Europe and the US session, the price could drop out at $ 1,073.61 makes 23.6 / ounce and ended the day at $ 1,068.63 around makes 38.2 / ounce.

Market commentary

Today, gold may continue to rise for the third consecutive day amid US economic data may negatively affect the stock and reduce the likelihood of the Fed raising interest rates at a meeting March 4/2016. Predictions can turn up the $ 1.086 / ounce.

However, as discussed in the Risk, gold prices may continue to decline, plunged into the threshold $ 1,068 / ounce.

Analyses of Group If24h

Linh Nhan